Is this the final burn for ‘Cigar City’?
THE last standing cigar factory here, in what was once dubbed “Cigar City”, has survived two world wars, the Great Depression, smoking bans and a Cuban trade embargo that wiped out its tobacco supply.
Its fortunes have long been linked to Cuba, the communist nation that for decades supplied the region’s tobacco and continues to mint many of its workers. For years cigar executives here say they have looked to Cuba with equal parts intrigue and trepidation, a sentiment that has become more pronounced in recent years as the United States began to mend decades of strained relations with the island nation.
The death of Fidel Castro – the most iconic of cigar smokers – marks yet another milestone for the region. Many here wonder whether the once-booming cigar industry may be on its way out as well.
Among those most worried: Eric Newman, whose family has been making 31 brands of cigars, including Cuesta-Rey, Diamond Crown and La Unica, for three generations.
For 121 years, the JC Newman Cigar Co has churned out millions of cigars and shipped them worldwide - even as, one by one, 149 surrounding factories shuttered their doors, many moving their operations overseas.
But now Newman, who owns the company with his brother, Bobby, says cigar manufacturers and retailers in this stretch of town known as Ybor City face hurdles that could deal a final blow to an industry that has, until now, gone largely unregulated.
The US Food and Drug Administration this year introduced new guidelines that will require cigar manufacturers to get approval for new products, pay increased fees and add prominent warning labels. The FDA says the measures, which will be phased in over three years, are a matter of public safety and are meant to curb underage tobacco use. Before August, no federal law prohibited the sale of cigars, e-cigarettes or hookah tobacco to children under 18.
“For years, the unregulated market- place was like the Wild, Wild West,” said Mitch Zeller, director of the FDA’s Center for Tobacco Products.
The new rules, Zeller says, will help bring order to a corner of the tobacco industry that has long operated without oversight.
Newman, though, says the regulations represent millions of dollars in new costs and increased uncertainty for his factory, which last year had sales of $10 million. On top of that, he says, the Obama administration in October loosened its ban on Cuban cigars, allowing Americans to bring back as many cigars as they like for personal use. Newman says the move, part of the thawing of relations between the nations, introduces another layer of competition at a critical time.
“What we’re dealing with right now is the worst it’s ever been,” said Newman, whose grandfather started the business at age 20 in a family barn.
And now, with the election of Donald Trump as the country’s next president, Newman says he’s dealing with even more uncertainty about the future. Will the new regulations remain in place? And if so, for how much longer?
In the meantime, he says there are pressing matters, including a looming deadline on December 31 that requires him to register more than 1,300 cigar varieties with the government. In all, the process could cost him more than $14 million.
Proximity to the ocean
“We just have to plow ahead,” Newman says, sitting up straight.
“If I think about it for too long, I get nauseous.”
JC Newman’s future may be up in the air, but inside the company’s brick factory on the edge of town, operations are as they’ve always been: Tobacco from countries such as Ecuador, Nicaragua and the Dominican Republic is dried and blended on the top level, then funnelled down a chute onto the factory floor, where more than 100 workers – most of them women – fill, bind and wrap cigars using machines that date from the 1930s.
In an election year where much of the rhetoric had focused on bringing back manufacturing jobs, Newman says he can’t understand why the government would want to increase burdens on an operation like his. He says having to lay off workers or, worse, move the factory to Nicaragua, where the company already has a sprawling plant and 650 employees, would have discernible consequences for the community.
“Cigars are the heart and soul of Tampa,” he said. “We’re here. We’re employing more than 100 people. Just don’t close us down.”
The fortunes of Ybor City have been tied to Cuba since the 1880s, when Spanish cigar maker Vicente Martinez Ybor made his way up from Havana to Key West and eventually to Tampa, lured by the region’s humidity and proximity to the ocean. Ybor bought 40 acres of land and built his first cigar factory. To attract workers – immigrants from Cuba, Italy, Germany and Spain – he built hundreds of small houses that he rented out for about $1 a week. As business grew, so did the number of competing manufacturers who moved to the area in search of skilled workers and ready access to Cuban tobacco.
By 1900, Ybor City had 232 factories making nearly 600 million cigars a year.
When the Great Depression struck in 1929, the local cigar industry was among the hardest hit. Factories closed, unemployment soared and many residents left. Decades of decline followed as Americans traded hand-rolled cigars for inexpensive, machine-made cigarettes.
The biggest blow to the industry came in early 1960s when the United States imposed the Cuban trade embargo, halting the flow of tobacco from the island into Ybor City. Almost all of the region’s cigar makers relocated to Honduras, Nicaragua and the Dominican Republic as a result.
In the years since, there have been hints of promise as small storefronts crop up on Ybor City’s main stretch. But nearly everyone here agrees: The town’s glory days are gone. Ybor’s original factory is now home to the Church of Scientology. Another factory down the street is being converted into luxury apartments.
Over a kilometre from the JC Newman factory, on a stretch of Seventh Avenue dotted with cigar shops, Ernesto Ceijas, 39, sits in a storefront window cutting swaths of dried tobacco. He fills them with tobacco leaves, rolls them tight and seals them shut.
On a good day, he makes 100 ci- gars – which means about $100.
“It’s a hard life to make cigars,” says Ceijas, who works at Long Ash Cigars, a boutique and lounge. Like the seven other rollers there, he is a Cuban immigrant who is paid about $1 for each cigar he makes. They will sell in the shop for between $3.50 and $13.
But Michael Cincunegui, the shop’s owner, says cigar prices are likely to go up as more federal regulations take hold.
“Yes, there’s going to be an impact, and yes, costs will go up,” he said. “It’s just hard to tell how much.”
Cincunegui, whose great-grandfather emigrated from Cuba, says he was hopeful that recent strides in US-Cuba relations would mean an eventual opening of trade between the two countries, allowing him to import coveted Cuban cigars and tobacco to sell in his Ybor City store. President-elect Donald Trump, however, has repeatedly vowed to “terminate” newly minted ties with the communist nation, leaving Cincunegui and others even more anxious about their future.
“It’s a new administration, and we don’t know the first thing about what to expect,” he said. “All we can do is roll with the punches.”
Cincunegui opened his shop four years ago, days before the 2012 Republican National Convention came to town. He is among a new crop of small-time entrepreneurs hoping to eke out a living in Tampa’s fading cigar industry. Like the Newmans, he is grappling with new regulations and changing ties with Cuba.
The last plant to close in Ybor City, Hav-a-Tampa, moved its operations to Puerto Rico in 2009 after the federal government increased taxes on large cigars from 5 cents to 40 cents. Nearly 500 people lost their jobs. “It was the worst time of my life,” said Joe St Charles, 51, a mechanic there who made $28.50 an hour.
After a stint in Puerto Rico, St Charles is back in Tampa working for JC Newman. He makes more than $30 an hour now, plus overtime, as the factory’s lead mechanic. His fiancee, a cigar roller he met at JC Newman, makes about $20 an hour. he’ll make